Choosing the Right Director
I’ve been considering buying a new car for a little while now. We’ve all been there at some point in our lives. The process is generally the same. What are our absolute non-negotiables? For me the list looked something like this: 4 doors, lots of space in the boot (so station wagons and SUVs are clear winners here!), a great safety rating and good fuel economy. For others this list could look quite different. Then there are the nice to haves. The heated seats, the Bluetooth connectivity, maybe even some USB ports so I don’t have to bring my own charger.
The point here is that you don’t go buying a new car without doing a lot of research into what you want. Similarly, when a board is inviting an independent director to join the team, a healthy amount of due diligence in what the board’s requirements are is absolutely necessary.
Before you start your search:
- Take a detailed look at the business and identify any gaps or shortcomings
- Look at the existing board and consider if all the roles are covered. Do the existing board members understand their roles clearly?
- Occasionally individuals are appointed not because of their expertise but because of their relation to an existing owner. How does this affect the business?
- What does the future of the business look like? What gaps can be identified in the existing board that would prevent the full potential of this future growth?
- Is there a need for a Subject Matter Expert (SME) or a specialist in a particular area of the business?
- Would the board or management benefit from bringing on a board member who can further their technical or soft skills?
The board member being invited, at minimum, should have:
- Some professional training, a healthy amount of experience and sound judgement. Some industries like the aviation industry have a “fit and proper person” test, where they ensure that the potential candidate can demonstrate that they are “sufficiently sensible, careful and law-abiding”. While there is no legal requirement for this in the governance world, it is perhaps a good starting point for a non-negotiable.
- Proven track record of having good interpersonal skills for internal and external relationships. Unofficial references and word of mouth can be crucial here.
Qualities and other requirements:
- Business acumen – You need someone who genuinely understands your business, or they won’t be able to make a positive difference.
- Industry knowledge – This goes without saying, however someone with a background in your current industry or the one your business wishes to grow into is going to be very beneficial.
- Think about tomorrow, Act today – You want someone who can look at the future, the growth of the business and where it wants to be, but has the nous to suggest and implement the changes required to get there today.
- Fresh, fresh, fresh! – Having a new board member who brings fresh, original or innovative insights and ideas can do wonders for the business.
- Interpersonal skills – The ability to work in a team is crucial for the success of any business.